Multicollinearity test of variables included in the profit efficiency/inefficiency analysis
| Variables | Collinearity statistics | |
|---|---|---|
| tolerance | VIF | |
| Efficiency variables | ||
| Fertiliser cost | .531 | 1.883 |
| Pesticide cost | .430 | 2.326 |
| Herbicide cost | .447 | 2.238 |
| Hybrid seed cost | .499 | 2.005 |
| Water cost | .768 | 1.302 |
| Labour cost | .638 | 1.568 |
| Tractor cost | .649 | 1.542 |
| Transport cost | .775 | 1.290 |
| Storage cost | .620 | 1.613 |
| Processing cost | .372 | 2.691 |
| Mean VIF | 1.846 | |
| Inefficiency variables | ||
| Age | .629 | 1.589 |
| Education level | .808 | 1.238 |
| Household size | .961 | 1.040 |
| Farming experience | .742 | 1.347 |
| Mean VIF | 1.304 | |
Maximum likelihood and profit inefficiency determinants
| Parameters | Coef. | St. Err. | p-value | t-value | |
|---|---|---|---|---|---|
| Production factor | |||||
| (Constant) | β0 | –17.796 | 3.908 | 0.000 | –4.55 |
| Fertiliser cost | β1 | –.013 | .623 | 0.839 | –0.20 |
| Pesticides cost | β2 | .053 | .823 | 0.519 | 0.65 |
| Herbicides cost | β3 | .023 | .108 | 0.830 | 0.21 |
| Hybrid seed cost | β4 | –.053 | .081 | 0.510 | –0.66 |
| Water cost | β5 | –.160 | .047 | 0.001 | –3.42*** |
| Labour cost | β6 | –.035 | .057 | 0.536 | –0.52 |
| Tractor cost | β7 | –1.591 | .534 | 0.003 | –2.98*** |
| Transport cost | β8 | –.126 | .074 | 0.087 | 1.71* |
| Storage cost | β9 | .111 | .108 | 0.305 | 1.03 |
| Processing cost | β10 | –3.893 | .450 | 0.000 | 8.66*** |
| Insig2v | 1.891 | .084 | 0.000 | 22.63 | |
| Inefficiency variables | |||||
| (Constant) | αo | –8.536 | 14.031 | 0.543 | –0.61 |
| Age | δ1 | .129 | .191 | 0.501 | 0.67 |
| Education level | δ2 | –.748 | .678 | 0.070 | 1.68* |
| Farming experience | δ3 | –.019 | .082 | 0.042 | –2.68** |
| Household size | δ4 | –613 | .506 | 0.226 | –1.21 |
| Sigma | 2.574724 | ||||
| Mean dependent var | 2.367 | SD dependent var | 3.546 | ||
| Log Likelihood | –727.72436 | ||||
| Number of obs | 307 | Chi-square | 231.385 | ||
| Prob > chi2 | 0.000 | Akaike crit. (AIC) | 1489.449 | ||
Population and sample size of the study
| District | Targeted smallholder farmers (N) | Sample size |
|---|---|---|
| Capricorn | 107 | 22 |
| Mopani | 379 | 77 |
| Sekhukhune | 378 | 76 |
| Vhembe | 510 | 103 |
| Waterberg | 144 | 29 |
| TOTAL | 1518 | 307 |
Frequency distribution of maize farmers
| Efficiency class index | Frequency | Percentage |
|---|---|---|
| < 0.60 | 54 | 16.29 |
| 0.60–0.69 | 118 | 38.44 |
| 0.70–0.89 | 84 | 27.36 |
| 0.90–099 | 5 | 17.92 |
| Mean: 0.612 | ||
| Min: 0 | ||
| Max: 0.90 | ||